Since 1999, lenders have been legally obligated to cancel a borrower's Private Mortgage Insurance (PMI) when his loan balance (for a loan made past July of that year) reaches less than seventy-eight percent of the price of purchase, but not at the point the loan's equity reaches more than twenty-two percent. (There are exceptions -like some loans considered 'high risk'.) However, if your equity gets to 20% (no matter what the original price was), you have the right to cancel PMI (for a loan that after July 1999).
Study your mortgage statements often. You'll want to be aware of the the purchase amounts of the houses that sell around you. You are paying mostly interest if your loan closed fewer than 5 years ago, so your principal probably hasn't lowered much.
Once your equity has reached the required twenty percent, you are just a few steps away from getting rid of your PMI payments, once and for all. Contact your lending institution to request cancellation of your PMI. Then you will be required to submit documentation that you have at least 20 percent equity. A state certified appraisal documented on the appropriate form (URAR-1004 - Uniform Residential Appraisal Report) is all the proof you need � and your lender will probably request one before they agree to cancel.
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